IT Project Risk Management: Framework & Process

Instructor: Audrey Brown

Dr. Audrey E Brown has a PsyD in Organizational Leadership, an MS in Management of Programs & Projects, in addition to 15+ years of experience in the field.

IT project risk management is designed to help you control and manage events within the project. The goal of this lesson is to cover the definition of risk management and the framework and process for risk management.

IT Project Risk Management Overview

Risk management is the best hidden secret because it ensures project managers deliver their projects successfully. Do you want to know the secret to delivering your project on time, on budget, and with the expected results? Do you want to know the reason successful project managers have minimal post-implementation issues? Well, the secret is you need to establish a risk management framework at the beginning of the project and integrate the risk management process from inception through implementation.

Unfortunately, many project managers view establishing a risk management log at the inception of the project as an artifact that needs to be checked off on their action item lists. Some project managers do not use a risk management log because they lacked the training. Well, this is your lucky day because the risk management process is about proactively managing positive and negative uncertainties that will help you deliver your projects successfully.

Risk Management Framework

The late Rita Mulcahy championed the importance of the risk management framework and process. Mulcahy taught that risk management allows project managers to manage their projects instead of the projects managing them. The risk management framework consists of:

  1. Plan risk management: Develop a plan with your team to discuss how to capture project risks
  2. Identify risks: The identification of risks and entering risks in a log
  3. Perform qualitative risk analysis: Prioritizing risks
  4. Perform quantitative risk analysis: Performing a computation of each risks on the project
  5. Plan risk responses: Develop a proactive response, just in case the risk happens
  6. Control risk: Tracking and monitoring the risk log

Inputs

Now that you have learned the risk framework, let's execute the risk management process. There are five sources for inputs for your risk management plan process, which are:

  1. Project management plan: This document consists of seven major subsidiary plans and several minor plans
  2. Project charter: This document provides high level descriptions and requirements
  3. Stakeholder register: A matrix capturing the overview of stakeholders' roles
  4. Enterprise environmental factors: Communicates your organization's risk tolerances level
  5. Organizational process assets: Risk categories, decision makers, and lessons learned

In other words, during the kick-off session of your project, you need to discuss the risk management framework and seek buy in from all stakeholders because identifying and proactively managing risks is a team effort. It is essential that you educate your project team on the importance of managing risks the entire project life-cycle. Although, you will document risks during the construction of your project management plan, schedule a designated risk management planning session, which you will use the above five sources as your input.

Risks vs. Issues

A risk is something that may occur and an issue is a risk that has transitioned to an issue. Now it is an issue, you need to execute your risk response plan. The reason your project will still be implemented successfully because you and your team proactively created a risk response plan and the next step is to execute your plan, which will allow your project to continue to move forward. If you did not have a risk response plan, you and your team would be in a reactionary mode (trying to develop a corrective action plan).

For example, a construction project manager worked with a church's board who had recently purchased a church in need of renovation and two other buildings. The board put the old church building up for sale. The project manager presented a sales risk--what do you plan to do if the old church building sells before you complete the renovation of the new church? As a response plan, the board decided to modify building number 2 in order to support the church's services.

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